Holdsworth v. Shannon

113 Mo. 508 | Mo. | 1893

Sherwood, J.

The salient questions which lie at the threshold of the investigation necessary in regard to the merits of this controversy are three, and these: First. Was the sale made at an unusual hour? Second. Was the property sold for an inadequate price, which, coupled with other circumstances, authorized the sale to be set aside? Third. Are the defendants, Hinton and Harbison, to be regarded as innocent purchasers, that is, purchasers without notice and in good faith.

Of these in their order.

I. As to the first. The preponderance of the testimony shows the sale occurred just before eleven o’clock. The testimony of Shannon, the sheriff trustee, leaves no doubt on the point if we are to look to his testimony alone; it is conclusive on the point of the sale in question having been made at an unusual hour, and conclusive also of the prevalent custom to make such sales at a later period in the day. He says: “I generally legan my sheriff’s sales from half past one o’clock to two o’clock in the day. In the course of my duties as sheriff I had never made a sale under a trust deed or %mder an exemtion as early in the day as I in fact made this one. I usually made them about half past one after we had got back from dinner. * * * Had it not been for the circumstances I have related, I would not have made the sale at that time of day. In fact, I know Iwouldn’t; it was not the custom.”

The testimony of other witnesses corroborates that of the sheriff as to the customary time of making such sales. Hinton, one of the defendants, says: “Sales are most usually made after dinner.” Osborne, a •witness interested in the same trustee’s sale, though in regard to another tract of land, says: “The bulk (of sales) is made between twelve and five o’clock.” Geyer, another witness, says:. “The majority of the sales are made about one o’clock, or between one and two o’clock.” Other witnesses testify about sales having occurred before the customary time as heretofore mentioned; but not one of them is able to state that such sales did not occur with the consent .and in the presence of all parties in interest.

The occasional occurrence of some such sporadic instances would be but the exception which proves the rule, and would have no more power to break the bands of the prevalent custom than would the early advent of a single swallow to break the icy chains of winter and bring on untimely wing the balmy influences of the vernal season. The finding of the circuit court was that the sale took place at an unusual hour, and we see no reason to disapprove of the correctness of that conclusion.

II. Was the land sold at an inadequate price? On this point, as might be expected, the opinions of the various witnesses differ considerably. The estimates placed upon the value of the land in litigation varies in amount from $1 to $4 per acre. Now if we strike a mean between the highest and the lowest estimates of value, we find that this will place the reasonable price of the land at $2.50 per acre, which amounts to $400 for the tract; and this is what Hinton asked the representative of the Watkins company for it, when approached by him a week or so after the sale, in order to see if an adjustment could not be affected. This one hundred and sixty acres had a hewed log house on it with a stone chimney, stables and smokehouse, and about ten acres in cultivation, also an excellent spring on the tract, and about forty acres of it, taking different portions of it for that purpose, could be put in cultivation. The sum of $400, then, ought to be taken as a reasonable price for the land, especially so, as Wills, who was interested in the purchase of the southwest quarter, says that quarter “was worth probably $250 to $300;” but it is conceded on all hands that the last-named quarter, by reason of having no. improvements or spring on it, was much less valuable than the one in suit. So that if $400 is to be taken as the proper estimate to place on the value of the property in controversy, then its sale for $121 was a sale for but little over one fourth’of its value.

The general rule is stated in the books that mere inadequacy of price without more, unless so gross as to shock the moral sense, is insufficient to set aside a sale of land inade under a deed of trust, foreclosure or execution. But in such case, the sale must be fairly conducted in all other respects. Several instances have occurred where this court has set aside sales where the price was inadequate, though not grossly so, where there were other attending circumstances, rendering it inequitable to let the sale in the given instance stand; as for example, in Stoffel v. Schroeder, 62 Mo. 147, where the property sold under a deed of trust at $5,000 and was worth $8,500, and the sale was set aside, having been made at an unusual hour, to-wit, eleven o’clock a. m. It is true that case smacked of fraud, while this does not; but in one respect they are parallel in principle, that is, the trustees in the former case and the sheriff-trustee in the latter, were prevailed upon to sell the property at an unusual hour, and in consequence of this, the property in the case at bar only brought about one fourth of its reasonable value. The fact that tlie sheriff-trustee wás pressed to attend to other duties did not authorize him to do this to the neglect of other duties and the detriment of other interests.

In Vail v. Jacobs, 62 Mo. 130, where property-worth from $5,000 to $8,000, was struck off to the assignee of the notes, the only bidder at the sale, for $1,000, we set the sale aside, though it was made within usual hours. In the cases mentioned, others are instanced from our own reports teaching the doctrine that a trustee in the exercise of the power of sale, must act with the strictest impartiality and integrity, and, if it appear that they have abused their trust in any manner by a fraudulent combination with anyone to the detriment of any party in interest, or even if it appear that substantial injury has resulted from their acts in failing or neglecting to discharge their duties by exercising a wise and sound discretion, equity will grant relief. Goode v. Comfort, 39 Mo. 313.

In Stoffel v. Schroeder, supra, we said: “It has always been the doctrine of this court, as well as of courts elsewhere, that the mode of sale referred to, being a harsh method of disposing of the equity of redemption, should be watched with jealous solicitude, and overthrown, if not conducted with all fairness and integrity, and that the trustee is bound to act bona fide, as, in exercising the power, he becomes the trustee of the debtor, and should adopt all reasonable modes of proceeding in order to render the sale beneficial to the debtor, and cannot shelter himself under a bare literal compliance with the conditions imposed by the terms of the power.”

Shaw, C. J. in Howard v. Ames, 3 Met. 311, said: “In executing the power he becomes the trustee of the debtor, and is bound to act bona fide, and to adopt all reasonable modes of proceeding, in order to render the sale most beneficial to the debtor.”

Vice-Chancellor Sir Knight Bruce uses this language: “A mortgagee having a power of sale cannot, as between him and the mortgagor, exercise it in a manner merely • arbitrary, but is, as between them, bound to exercise some discretion; not to throw away the property, but to act in a prudent and business-like manner, with a view to obtain as large a price as may fairly and reasonably, with due diligence and attention, be under the circumstances obtainable.” Matthie v. Edwards, 2 Coll. 465.

Tested by the standard thus fixed by the authorities, it cannot justly be said that the sheriff-trustee fulfilled the measure of his duty if that duty be considered only with reference to the value of the property and the price which it brought.

But we need not look alone to the inadequacy of the price for which the land sold, nor the unusual hour at which the sale occurred; there is yet another element presented by the testimony for consideration, and that is the fact that the agent of the plaintiff, in the exercise of due diligence, and without fault on his part, failed to reach the place of sale in time to participate therein, and prevent a sacrifice of the property. This makes a stronger case than where a party through mistake or inadvertance of himself or agent has failed to attend a sale. Yet, even in cases of that sort, relief has frequently been afforded in equity, on the ground of accident or surprise. Thus in Williamson v. Dale, 3 Johns. Ch. 290, plaintiffs were innocently misled as to the day of sale, and so were not present. No improper intention was imputable to the adverse party, nor of unfair conduct at the sale, which was perfectly regular and fair; but the property estimated to be worth $12,000, subject to a prior incumbrance of $2,700, was sold for a like sum. and the sale was set aside, on the ground of surprise; equitable terms being imposed upon the applicants for relief.

In Bixly v. Mead, 18 Wend. 611, the plaintiff employed an agent to attend the sale and bid in the property for him; agent forgot to do so; property sold at a sacrifice; purchaser insolvent; sale set aside.

In Howell v. Hester, 3 Green. Ch. 266, a second mortgagee, by mistake of her agent, was prevented from attending the foreclosure sale made under a prior incumbrance. The premises sold for an inadequate price, to-wit, $100, when worth $500, to the prejudice of the second incumbrance; sale set aside.

■ So in Seaman v. Biggins, 1 Green. Ch. 214, agent of a second incumbrancer failed to reach the place of sale in time, owing to accident in missing his way, and to another unintentional mistake. The sale was advertised for one o’clock and occurred at half past one. Owing to the mistake and accident aforesaid, the agent did not reach the point until two o’clock. The property ' was sold for only sufficient to satisfy the first mortgage; but was worth, enough to satisfy both mortgages, and the mortgagor was insolvent; the sale was set aside on equitable terms.

In Griffith v. Handley, 10 Bosw. 587, defendant’s attorney made a mistake as to the day of sale; property sold greatly under value, without much competition. Held a case of surprise, which, coupled with in adequacy of price, justifies setting the sale aside, which was done.

In another case the petitioner holding the equity of redemption, and, innocently misled as to the day of sale, was prevented from attending, and in consequence the property was sold for about sixty per cent, of its value. Held, such a case of surprise coupled with inadequacy of price as justified setting the sale aside. Wetzler v. Schaumann, 24 N. J. Eq. 60. To the same purport is Collier v. Whipple, 13 Wend. 224.

In Hoppock's Ex’r v. Conklin, 4 Sandf. Ch. 582, the defendant in a foreclosure suit, liable for any deficiency, intended to be present at a foreclosure sale, but was prevented by being detained as a juror, and vainly tried to get the court to excuse him, and, failing in this, wrote to an entirely reliable agent to represent him and bid in the property for him. Letter failed to reach agent till an .hour after sale; property bid in by complainants for one third of its value, leaving a large deficiency. Court ordered a resale. It is true these cases from which quotations are just made were foreclosure cases where deeds had not been executed; but they serve to illustrate the doctrine of courts of equity on the point in hand.

In the case at bar the plaintiff had done everything required of him. No just charge of negligence can be laid at his door. He had even gone further than parties in interest had gone in the cases instanced; for he had written a letter to Shannon informing him that they wished an attorney to representthem at the trusteed sale, and this only a few weeks before it occurred. It was the duty of the sheriff to have remembered this letter, and, even if the sale had occurred, at a regular howr, to have postponed the sale for a short time and awaited the arrival of the expected agent. Seaman v. Riggins, 1 Green Ch. loc cit, 218. But the failure of the sheriff to remember, should not operate detrimentally to the interests of the plaintiff, whose only hope for the satisfaction of his debt is the relief he seeks.

III. Are the defendants to be regarded as purchasers without notice and in good faith? There is sufficient testimony in this record to show notice to them before they paid the purchase money. But they cannot occupy the attitude of such purchasers, for the reason that their pleading does not warrant it. Their answer was a general denial. The plea- of “innocent purchaser” is an affirmative defense, and must be affirmatively pleaded and proven; the onus lies on the pleader.

In Frost v. Beekman, 1 Johns. Ch. 288, Chancellor Kent says: “If a purchaser wishes to rest his claim on .the fact of being an innocent bona fide purchaser, he must deny notice, though it be not charged; he must deny fully and in the most precise terms every circumstance from which notice could be inferred.” See also, Halsa v. Halsa, 8 Mo. 303, and Sillyman v. King, 36 Iowa, 208, and cases cited.

- For the reasons aforesaid, judgment affirmed.

Gantt, P. J., concurs; Burgess, J., in affirming the judgment; but reserves his opinion on the question of pleading.